M1 Multiplier is PERSISTANTLY below 1.0, and dropping
M2 Velocity is sinking rapidly
Banks are holding onto money, instead of investing it
Remember, Monetary Velocity is the Single Best Indicator of Economic Health
Unemployment is becoming permanent
Corporations are sequestering Money, instead of investing
Well, if money velocity is dropping as the chart you present shows, this tells us that all these QE’s the Fed is doing isn’t really affecting the economy.
It also tells us that THAT is the main reason why despite the FED pumping money, inflation is relatively tame.
There is an explanation as to why Money Growth does not necessarily lead to inflation here (for those interested):
http://www.forbes.com/sites/johntharvey/2011/05/14/money-growth-does-not-cause-inflation/